UK equities fell on Friday as weak housing figures and escalating geopolitical tensions in the Middle East combined to dampen investor confidence across markets.
The FTSE 100 was down 0.23% by early trading, while sterling held relatively steady against the US dollar at 1.3439, rising just 0.08% on the session.
European markets broadly shared the cautious tone, with Germany’s DAX declining 0.34% and France’s CAC 40 slipping 0.07% as investors remained on edge.
The latest Halifax House Price Index revealed that average UK property prices fell for a second consecutive month in May, declining 0.1% to £298,806.
Annual house price growth remained subdued at just 0.5%, underscoring continued pressure on the residential property sector amid stretched affordability conditions.
Amanda Bryden, Head of Mortgages at Halifax, said “property price trends continue to reflect the uncertainty linked to developments in the Middle East,” adding that “higher inflation expectations have kept borrowing costs above the level seen at the start of the year, continuing to stretch affordability for many buyers.”
Regional disparities across the UK housing market were stark, with Northern Ireland posting the strongest annual growth at 7.8%, while London saw prices fall 1.5% to £534,375.
South East England recorded an even steeper decline, with property values dropping 2.1% to £382,704, highlighting the particular vulnerability of higher-priced southern markets.
Energy markets added further uncertainty, with Brent crude trading near $95 per barrel and on course for a weekly gain of more than 3%, which would end a two-week losing streak.
The price surge followed an explosion near Oman’s Mina al Fahal oil terminal, which temporarily disrupted loading operations at the country’s main crude export facility before resuming normally.
Oman’s state news agency cited Petroleum Development Oman in confirming that operations had resumed, though authorities did not provide details regarding the cause of the incident.
Reuters had previously reported that the explosion near the terminal’s offshore loading facilities was believed to have resulted from a drone attack, heightening concerns about regional energy security.
Traders continued to watch developments around the Strait of Hormuz closely, given the waterway’s critical importance to global oil supply chains.
Data from Lloyd’s List showed Iranian crude exports fell 84% in May compared with the previous month and were 87% below their average level over the past year, reflecting intensified US pressure on Tehran’s shipping operations.
Iranian parliament deputy speaker Hamidreza Haji-Babaei indicated that lawmakers had reviewed plans governing vessel traffic through the strategic waterway, saying a “powerful resolution” would be approved without offering further details.
On the diplomatic front, Iranian Foreign Minister Abbas Araghchi said that “no tangible progress” had been achieved in talks with Washington, though he confirmed communication channels between the two sides had not been completely severed.
Araghchi also dismissed comments by US President Donald Trump regarding a possible meeting with Iran’s supreme leader Mojtaba Khamenei, saying the matter should be viewed “in the real world.”
Speaking from the Oval Office, Trump revealed he had considered deploying special operations forces to secure Iran’s stockpile of highly enriched uranium but ultimately rejected the idea due to risks associated with a prolonged military operation.
Hopes for broader regional stability were further dampened after Hezbollah leader Sheikh Naim Qassam firmly rejected a US-brokered ceasefire proposal concerning Lebanon, describing it as “a roadmap for the destruction of part of the Lebanese people.”
His comments reinforced market concerns that geopolitical tensions across the region could persist well into the coming weeks, keeping energy prices elevated and equity sentiment fragile.